Suburban flight and city housing

Suburban flight has become a big deal in Germany over the last few weeks. A comprehensive new study has just been published, the Postbank Housing Atlas 2016. The study presents a range of findings, including details of the link between city-centre housing prices and the number of workers commuting into and out of a city. Postbank identifies Frankfurt, Düsseldorf and Stuttgart as the German cities with the highest numbers of workers who live in the suburbs and surrounding areas. The figure for Frankfurt is the most extreme, with 50% of the city’s workforce commuting to work each day.

Suburban flight driven by price rises

The study identifies what it claims is a direct correlation between housing costs and the volume of commuters. According to Postbank’s analysis of the 36 biggest cities in Germany, for every €1,000/sqm added to condominium and house prices, the proportion of a city’s population that commutes to work jumps by 7%. The basic conclusion: Higher prices in attractive central locations are driving the trend towards suburban and exurban living. Would-be tenants and buyers are increasingly unable (or unwilling) to meet the extra cost of living centrally. As a result, they are turning to the suburbs, city fringes and surrounding localities as alternatives. Because many of them still work centrally, there has been a corresponding rise in commuting.

Commuters take the heat off inner-city housing markets

Following this train of thought to its logical conclusion it is clear that, as more and more people abandon central districts in favour of the suburbs, demand in over-heated city-centre housing markets cools. This ensures that price rises are not overly excessive. Postbank provides a range of model calculations to demonstrate the likely impact on housing markets if just 50% of commuters decided to move back into the central districts of their cities. The biggest rent and price increases would be seen in Frankfurt, with hikes of almost 50%. Prices for apartments and condominiums in Düsseldorf, Stuttgart and Mannheim would shoot up by nearly 40%.

Should authorities embrace this suburban flight?

The Postbank study advises municipal authorities to capitalise on this trend and offer commuters the infrastructure they need to make their daily commute as easy and stress-free as possible. If cities don’t react, the study warns, the trend could just as easily reverse and the commuters could come flooding back into the city to live. This would exacerbate the shortage, and cost, of housing with a city’s limits. The study claims that investments in public transportation systems and improved road networks reduce, or at least keeps a lid on, housing prices in central districts.

Worst traffic jams in Hamburg, Berlin and Cologne

The study shows that in major cities, such as Berlin, Hamburg, Munich and Cologne, commuters spend a lot more time in their cars and on trains than in smaller cities. Berlin’s commuters face an average 78-minute drive from the city’s surroundings into the central business district. This adds an average of 17 minutes to rush hour journey times for all drivers, making car journeys 28% longer than they would otherwise be.

Suburban flight in other countries: Pull…

I grew up in Birmingham, UK, so it’s quite interesting to observe some key differences between Germany’s current suburban flight and trends that developed in my home city (and country) thirty or more years ago. In Birmingham, as in many other regions in the UK, suburban flight had more to do with counter-urbanisation, the large-scale migration of the middle-classes from urban regions to suburban or exurban regions as they bought larger and more comfortable houses.

Inner-city living was typically synonymous with small, densely-packed terraced housing. As soon as families could afford to do so, they moved out of central neighbourhoods and settled in leafy suburbs. Widespread car ownership also helped and made it possible to travel quickly and conveniently over greater distances.

…or push

Some studies, particularly those focusing on cities in the United States, identified what became known as “white flight”. This term was used to describe the migration of white families from racially mixed neighbourhoods to racially homogenous suburban and exurban regions. It is interesting to note that, at least in the UK, both white and non-white Britons who can afford to do so are equally likely to leave mixed-race, inner-city areas. The major factors in the UK seem to be an overwhelming attraction to suburban living, combined with a household’s economic strength. The situation in the United States was fuelled more by a perceived deterioration of conditions in central neighbourhoods — rising crime rates, increased unemployment and the failure of the public school system. This became a vicious circle in many American cities. As small numbers of higher-income residents moved away, the situation deteriorated and even more higher-income households joined the exodus.
Either way, suburban flight in the UK and United States saw higher-earners flow out of central districts towards the suburbs and exurbs. The pattern in Germany is quite different and are seeing middle-income households increasingly squeezed out of central neighbourhoods, with only luxury condominiums, rental apartments and social housing left in their place (and roads clogged with commuter traffic).

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